SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 09-0018
DATE: 2012/09/26
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE CONSTRUCTION LIEN ACT, R.S.O. 1990, c.C-30 , as amended
BETWEEN:
SIRRO BROTHERS CEMENT FINISHING & SPRAY LTD.
Plaintiff
– and –
THE WEDGEWOOD BROCKVILLE INC., PAUL DAOUST CONSTRUCTION CANADA INC. and CANADIAN MORTGAGE LOAN SERVICES LIMITED
Defendants
Domenic Saverino, Counsel for the Plaintiff
Sean Van Helden, Counsel for the Defendant, The Wedgewood Brockville Inc.
Eric M. Appotive, Counsel for the Defendant, Paul Daoust Construction Canada Inc.
HEARD: August 21, 2012
pelletieR, J.
REASONS FOR JUDGMENT
ON PLAINTIFF’S MOTION TO AMEND STATEMENT OF CLAIM AND DEFENDANTS’ CROSS-MOTION TO DISMISS ACTION FOR DELAY
[ 1 ] In 2007, the Plaintiff contracted with the Defendants for the supply of labour and materials in connection with the construction of a retirement home. The Defendants claimed that the work did not meet the standards agreed upon. The Plaintiff caused a construction lien to be registered against the property on November 29, 2008. A statement of claim was subsequently issued on January 9, 2009.
[ 2 ] On November 3, 2009, the Defendants successfully brought a motion to have the lien vacated, as having been registered beyond the statutory limit of 45 days following the date of last supply of materials and services by the Plaintiff. The order provided that the lien and the certificate of action be vacated and that the Plaintiff pay costs of $3,500.00.
[ 3 ] The Plaintiff wishes to pursue the action within the simplified procedure, remove reference to the Construction Lien Act , and proceed on the basis of breach of contract.
[ 4 ] The Defendants are opposed, submitting that this would amount to a new claim outside the limitation period of 2 years, and arguing in the alternative that the matter must in any event be dismissed for delay.
[ 5 ] I have concluded that the present action may proceed in breach of contract and that while the Plaintiff has not been diligent in bringing this matter to trial, the delays incurred thus far do not compel an order dismissing the matter for that reason.
[ 6 ] In its original statement of claim, purporting to perfect the construction lien, the Plaintiff implicitly grounded its claim on the basis of the Defendants’ failure to meet its contractual obligations.
[ 7 ] Paragraph 8 of the statement of claim refers to an agreement entered, into on May 1, 2007, for the supply of labour and materials.
[ 8 ] Paragraph 9 refers to the Plaintiff’s performance of its obligations under the agreement, and the Defendants’ failure or refusal to pay $89,874.69 in consideration of the work performed and the materials supplied.
[ 9 ] Paragraph 14 sets out that the Plaintiff provided its services and materials pursuant to the agreement “at the request, upon the credit of, on behalf of, with the privity of, with the consent of, and for the direct benefit of the Defendants, Wedgewood and Daoust.”
[ 10 ] While the statement of claim was issued in order to perfect the construction lien, subsequently vacated, it is not restricted in its terms to an action under the Construction Lien Act . The order of Quigley, J., dated November 3, 2009, vacating the lien and the certificate of action under the Construction Lien Act did not purport to address the claim in contract. It could not have, as the 2 year limitation in relation to such a claim had not expired when the November 3, 2009 order was made. The order addressed simply the construction lien aspect of the claim, the Court having been directed to address nothing more. The substantive claim was not, in any way, addressed on its merits. It is now settled that a motion to dismiss an action under the Construction Lien Act may allow for the action to continue in breach of contract, there being no other impediments:
612354 Ontario Ltd. v. Tonecraft Corp . (1991), 5.O.R. (3d) 764 (Gen. Div.)
Eurocar Ltd. v. Vernich (1992), 1992 7555 (ON SC) , 9 O.R. (3d) 631 (Gen. Div.)
Golden City Ceramic & Tile Co. v. Iona Corp . (1993) , 1993 9364 (ON SCDC) , 106 D.L.R. (4 th ) 532 (Ont. Div. Ct.)
Teepee Excavation & Grading Ltd. and Springview Landscape Inc. v Niran Construction Ltd. and Victoria Wood Development Corporation Inc . (2000), 2000 3447 (ON CA) , 189 D.L.R. (4 th ) 210 (Ont. C.A.)
[ 11 ] In my view, the issue of dismissal for delay of the present action poses a more perplexing question.
[ 12 ] The contract forming the subject of the present litigation was entered into in May of 2007. The work was completed 4 years ago. The action was commenced in January 2009. It is unlikely that this matter could be heard in less than 4 years after the initial pleadings, and some 5 to 6 years since the agreement was entered into and the work performed.
[ 13 ] The proceedings have had a long and difficult history, marked by a lack of diligence on the part of the Plaintiff.
[ 14 ] Counsel for the Defendants tried in vain in early to mid 2009 to communicate with and convince Plaintiff’s counsel that the construction lien claim was statute barred and should therefore be dismissed. On the day of the eventual motion brought to obtain such an order, the Plaintiff was not represented, counsel having chosen to forward a letter to the Court seeking an adjournment, which was denied. The construction lien and the certificate of action were vacated November 3, 2009. The Plaintiff was ordered to pay $3,500.00 in costs.
[ 15 ] The Plaintiff served and filed a notice of appeal of that order. The appeal was subsequently dismissed for delay on January 13, 2010 by the Deputy Registrar for the Court of Appeal for Ontario, the appeal not having been perfected within the requirements of Rule 61.09 of the Rules of Civil Procedure . Costs were awarded against the Plaintiff in the amount of $750.00.
[ 16 ] Requests for prompt payment of the costs totalling $4,250.00 were ignored. Service of a notice of motion for an order seeking security for costs resulted in a negotiated settlement of the cost issue on the eve of the motion return date.
[ 17 ] The Plaintiff became aware of the Defendants’ current view that this action was strictly under the Construction Lien Act when it attempted to schedule discoveries. It then initiated the present proceeding to permit an amendment of the statement of claim. Notice for such a motion was served in August 2011.
[ 18 ] The matter remained dormant until a further notice of motion was served, returnable on the day that the present motion was argued. The Defendants brought a cross-motion seeking an order for dismissal on account of delay.
[ 19 ] Rule 24.01 allows a Defendant, not in default of any rules or orders to move for dismissal of an action where, among other conditions, the Plaintiff has failed to set the action down for trial within six months after the close of the pleadings. One issue which this raises is that, by the present Reasons for Judgment, the Plaintiff is permitted to amend its pleadings. Given the dispute as to whether the original statement of claim permitted the Plaintiff to pursue its action in breach of contract, it is difficult to conclude that pleadings are indeed closed.
[ 20 ] That issue aside, I have concluded that the delays are not of such proportions or consequences so as to foreclose on the Plaintiff’s entitlement to have this dispute litigated.
[ 21 ] The first year following the issuance of the statement of claim was occupied dealing with the validity of the lien. Some months were then occupied on the issue of the mounting costs and security for same. This was resolved in July 2010. There was a considerable period of inactivity between July 2010 and May 2011 when the Plaintiff notified the Defendants of its intention to schedule discoveries. Operating on the assumption that the claim was brought strictly under the Construction Lien Act and therefore not allowing for discoveries, the Defendants made their position known, which prompted the present motion and cross-motion.
[ 22 ] The delays are therefore significant, however to some extent explained. I am unable to conclude that the Plaintiff has been deliberate in attempting to delay the process or has demonstrated the type of indifference that creates a substantial risk that a fair trial cannot be achieved. The terms of the agreement entered into by the parties can still be determined. The Court has not been directed to any specific issue that will arise at trial, the determination by which is rendered impossible by the delays incurred thus far. Fading memories and changing perspectives are factors common to all litigation.
[ 23 ] The loss, destruction or contamination of evidence usually associated with irreparable prejudice are not demonstrated in the present matter.
Woodheath Developments Ltd. v. Goldman (2003), 2003 46735 (ON SCDC) , 66 O.R. (3d) 731 (Div. Ct.)
[ 24 ] In arriving at this conclusion, I am not influenced by the Plaintiff’s submission that the Defendants have failed to take the necessary steps to move the matter forward. The Defendants operated with the belief that the matter had ended with the order vacating the lien and the certificate of action. By September 2010, the Defendants felt that the matter was over, upon the expiry of the limitation period for commencing an action in breach of contract. Indeed, by its correspondence and motions, the Defendants did not idly await the outcome of the action.
[ 25 ] That said, having concluded that the delay in this action and its causes and consequences do not compel an order for dismissal under Rule 24.01, I am led to conclude that both parties have an interest in having the merits of this claim adjudicated without further delay. Accordingly, the following orders are made:
The Plaintiff’s motion to amend its pleadings is granted;
The Defendants’ cross-motion to dismiss the action for delay is dismissed;
The parties shall establish a mutually agreed upon schedule for the completion of the pleadings and any related issues in order to ensure the expeditious hearing of this action;
If the parties are unable to agree upon the terms of such a schedule, I shall remain seized of the case management of this case. Written submissions, not to exceed three pages in addition to any accompanying documents or materials, may be served and filed in order for any such disputes to be resolved by further order as necessary;
Unless they are able to agree otherwise, written submissions regarding costs for the present motion and cross-motion may be exchanged and filed no later than October 26, 2012.
Justice Robert Pelletier
Released: September 26 th , 2012
Sirro Brothers Cement Finishing & Spray Ltd. v.
The Wedgewood Brockville Inc.,
Paul Daoust Construction Canada Inc.
and Canadian Mortgage Loan Services Limited
2012 ONSC 5389
COURT FILE NO.: 09-0018
DATE: 2012/09/26
ONTARIO SUPERIOR COURT OF JUSTICE IN THE MATTER OF THE CONSTRUCTION LIEN ACT, R.S.O. 1990, c.C-30 , as amended BETWEEN: Sirro Brothers Cement Finishing & Spray Ltd. Plaintiff v. TheWedgewood Brockville Inc., Paul Daoust Construction Canada Inc. and Canadian Mortgage Loan Services Limited Defendants REASONS FOR judgment on plaintiff’s motion to amend statement of claim and defendants’ cross-motion to dismiss action for delay Justice Robert Pelletier
Released: September 26 th , 2012